Asking Rents Snap 20-Month Growth Streak, Post a Sequential Monthly Decrease of 0.1% in July
Today, Apartments.com – a CoStar Group company – published an in-depth report of multifamily rent growth trends for August 2022 backed by analyst observations.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220908005756/en/
Year Over Year Rent Growth, by Market (Graphic: Business Wire)
“After a 20-month run of positive monthly growth dating back to December 2020, the market finally witnessed negative asking rent growth on a monthly sequential basis from July to August, with rents down 0.1% in July,” said Jay Lybik, National Director of Multifamily Analytics, CoStar Group. “We’re seeing a complete reversal of market conditions in just 12 months, going from demand significantly outstripping available units to now new deliveries outpacing lackluster demand.”
YEAR OVER YEAR REMAINS POSITIVE, YET SHOWS SIGNS OF SLOWING
While sequential monthly rents posted negative, year over year rents remained in the green. However, the pace of deceleration picked up noteworthy speed with asking rents falling to 7.1% in August, down from 8.4% at the end of July. The current rent conditions highlight how the spring and summer leasing periods came up significantly short compared to pre-pandemic historical results.
FASTEST GROWING SUNBELT MARKETS WITNESS SUBSTANTIAL RETREAT
The Sunbelt region continues to have a strong hold on the market, home to six of the top 10 rent growth markets, according to Apartments.com. Yet, these same markets that had the fastest growing rents in 2021 are now witnessing the most dramatic pullback.
None of the top 40 largest markets saw year over year asking rents expand in August, pointing to the overall deterioration of market conditions. Palm Beach saw a dramatic slowing of growth, with asking rents decreasing from 30.6% in Q4 2021 to 8.2% at the end of August. Phoenix follows close behind with year over year rents dropping to 5.2% in August compared to 21.0% just eight months ago. Tampa and Las Vegas also witnessed rents retreating by over double digits so far this year.
MONTH OVER MONTH DATA REFLECTS DECLINE OF RENT GROWTH, SAN FRANCISCO NOSEDIVES
Sequential rents month over month paint the most striking picture of the deteriorating rental market. Only 13 of the 40 largest markets saw month over month rents holding positive or at zero. San Francisco rents declined the most in the past 30 days as far as absolute terms, down $29 or 0.9%, but Nashville led in percentage change, down 1.1% or $18. Orange County, on the other hand, saw rents over the past month rise 1.0%, adding $27 to the overall asking price.
The Sunbelt’s decline can be seen clearly in the month over month rent graph. Markets that posted negative August rent are dominated by Sunbelt locations, such as Orlando, Austin, Fort Lauderdale and Charlotte to name a few.
Year over year rent data continues to give the impression that the multifamily market is performing meaningfully above previous averages, but major markets continue to retreat quickly at a time of year in which they should’ve posted their best results. Market analysts will continue to keep a close eye on what’s happening in the Sunbelt as well as trends for sequential monthly rents.
About CoStar Group, Inc.
CoStar Group, Inc. (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information and analytics. Founded in 1987, CoStar conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyze, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Ten-X provides a leading platform for conducting commercial real estate online auctions and negotiated bids. LoopNet is the most heavily trafficked commercial real estate marketplace online. Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Westside Rentals, AFTER55.com, CorporateHousing.com, ForRentUniversity.com and Apartamentos.com form the premier online apartment resource for renters seeking great apartment homes and provide property managers and owners a proven platform for marketing their properties. Homesnap is an industry-leading online and mobile software platform that provides user-friendly applications to optimize residential real estate agent workflow and reinforce the agent-client relationship. Homes.com offers real estate professionals advertising and marketing services for residential properties. Realla is the UK’s most comprehensive commercial property digital marketplace. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. CoStar Group’s websites attract tens of millions of unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada and Asia. From time to time, we plan to utilize our corporate website, http://www.costargroup.com, as a channel of distribution for material company information. For more information, visit www.costargroup.com.
Apartments.com is the leading online apartment listing website, offering renters access to information on more than 1,000,000 available units for rent. Powered by CoStar, the Apartments.com network of sites includes Apartments.com, ApartmentFinder.com, ApartmentHomeLiving.com, Apartamentos.com, WestsideRentals.com, ForRent.com, ForRentUniversity.com, After55.com and CorporateHousing.com.
Apartments.com is supported by the industry's largest professional research team, which has visited and photographed over 500,000 properties nationwide. The team makes over one million calls each month to apartment owners and property managers, collecting and verifying current availabilities, rental rates, pet policies, fees, leasing incentives, concessions, and more. Apartments.com offers more rental listings than any other apartments website, and innovative features including a drawing tool that allows users to define their own search areas on a map, and a "Travel Time" feature that lets users search for rentals in proximity to a specific address. Apartments.com creates easy access to its listings through a responsive website and iOS and Android apps, and provides unmatched exposure for its advertisers through an intuitive name, strategic search engine placements and innovative emerging media.
The Apartments.com network reaches millions of renters nationwide, driving both qualified traffic and highly engaged renters to leasing offices.